Rise in house repossessions likely

A rise in the number of house repossessions is likely, in the coming quarters, as a means of stemming the strategic non-payment of outstanding home loans, Davy Stockbrokers has warned.

Yesterday’s second quarter mortgage arrears data, from the Central Bank, showed that repossessions between the beginning of April and the end of June remained low, with just 225 cases reported by lenders. In total, 2,228 cases have been reported in the past four years, even though one-third of all mortgage borrowers fall into the strategic non-payment bracket.

Imminent legislation dealing with the 2011 Justice Dunne/High Court ruling on lenders’ rights regarding repossessions will mean that repossessions “will have to rise — particularly in the buy-to-let sector — to provide a credible threat to strategic non-payment of arrears,” according to David McNamara of Davy Stockbrokers.

Yesterday’s Central Bank stats showed that just under 98,000 residential mortgages were in arrears for more than 90 days, as of the end of June. That figure accounted for 12.7% of all residential mortgage loans and was up from the 12.3% level measured at the end of the first quarter of the year.

Elsewhere, yesterday, industry representative body the Professional Insurance Brokers Association — which has worked to ensure distressed borrowers receive professional advice from qualified and regulated financial brokers — called the “lack of urgency” in dealing with the mortgage crisis “astounding”.

“The lack of urgency with which this issue is being addressed is astounding. Every month that ticks by puts those in arrears in a progressively worsening situation,” said PIBA’s chief operations officer, Rachel Doyle.

The Irish Banking Federation welcomed the third consecutive quarterly reduction in the pace at which people are falling into arrears, but said the overall increase was “unwelcome”, warning that arrears levels are likely to increase further before finally peaking.

Recent IBF figures showed that more than €500m worth of new mortgages were issued during the second quarter.